[Startup24+] Rapidly Changing Virtual Assets Every Day... Passive Investing Is Rising

Virtual Asset Investment Management Platform 'VegaX'
Designed to Generate Profits Amid Volatility
Through Index-Linked and Alpha Return Strategies
Aggressive Investment in NFTs Too

Sanghwa Lee, CEO of VegaX.

[Asia Economy Reporter Donghyun Choi] Bitcoin prices have been experiencing sharp fluctuations since the beginning of the year, increasing confusion among investors. With hundreds of virtual assets listed on exchanges and the market operating 24/7, it is quite challenging to immediately hedge against risks caused by unexpected variables. In this situation, demand is steadily growing for products that can track indices like passive funds or generate additional returns like dividends or interest in virtual assets.

Lee Sanghwa, CEO of VegaX (36, pictured), foresaw this trend in the virtual asset market early on and founded a startup headquartered in New York in 2020. He previously worked at BNP Paribas, a European investment bank (IB), and began his career on Wall Street after graduating from university. In 2014, he also established DarcMatter, a global alternative investment platform and the parent company of VegaX. Lee said, "Korea has a fast pace of fintech (finance + technology) and financial market development and a high adaptability to it, which is very positive," adding, "We decided to enter Korea to provide investors with better returns and easier investment methods by utilizing blockchain."

VegaX offers services that allow investors to earn additional income regardless of the price fluctuations of cryptocurrencies. When investors entrust their virtual assets to VegaX, the company invests by tracking indices it has designed. The investment engine is fully automated. For example, the Bitcoin strategy token ‘VEBE’ has achieved an average return of up to 15% so far when an investor deposits 1 Bitcoin for one year. The Ethereum strategy token ‘VEEE’ reaches up to 25%. If an investor deposits 1 Ethereum for one year, it accumulates to 1.25 Ethereum like interest. However, investors are responsible for any value depreciation due to price fluctuations.

As of the end of December last year, VegaX’s total assets under management (AUM) in virtual assets amounted to approximately 236.2 billion KRW. Lee stated, "Since January 2021, the growth rate of AUM has maintained double digits every month," and predicted, "The number of institutional investors interested in virtual assets is increasing, and trust in the US dollar is gradually declining, so the total assets under management will continue to grow."

In January, VegaX launched the ‘VegaX USDC Interest Income Product (VUSDC),’ an investment product based on the dollar-pegged stablecoin USDC. Stablecoins are cryptocurrencies designed to reduce price volatility and increase investment stability. For example, in the case of dollar-pegged stablecoins, depositing 1 dollar results in receiving 1 stablecoin, maintaining a 1:1 fixed value. Lee emphasized, "As seen during the Ukraine crisis, when bank transactions are cut off and currency cannot be used, people inevitably turn to virtual assets," adding, "As the DeFi (decentralized finance) ecosystem deepens, demand for stablecoins will grow even more."

VegaX’s most aggressive portfolio involves investing in non-fungible tokens (NFTs). Lee said, "Currently, rather than investing directly in NFTs, we invest in companies that have technology applying NFTs to the metaverse, such as Sandbox and Axie Infinity," and added, "If the metaverse grows further, there will be a need to invest directly in NFTs." He also expressed strong interest in the ‘P2E’ (Play to Earn) market, where in-game assets can be converted into coins or other virtual assets, stating, "We are studying various virtual assets and researching technologies to integrate them into investments to build more diverse portfolios."

This content was produced with the assistance of AI translation services.